Peirce | Crypto

The SEC commissioner said crypto vaults, onchain lending products and other asset management tools may trigger US securities laws depending on how they are structured and operated. SEC Commissioner Hester Peirce said crypto vaults and onchain lending products may fall under US securities laws, urging developers to assess whether products that actively manage user assets require regulatory compliance. In a statement published Wednesday, Peirce said crypto vaults and lending strategies that involve discretionary decisions, including allocating assets, selecting yield-generating activities, setting lending terms and determining liquidation thresholds, may fall within the scope of federal securities laws depending on their structure and operation. She said some vaults could be treated as securities offerings or investment companies, while parties managing vault allocations or lending parameters could also trigger investment adviser requirements. Read more

An executive at tokenization platforms Superstate said the stricter approach suggested by Hester Peirce would enable DeFi to expand without compromising rules in traditional capital markets. US Securities and Exchange Commissioner Hester Peirce has told the crypto industry to cool its expectations about a potential “innovation exemption” to allow tokenized stock trading after a report earlier this week about what it could entail.  Her comments were made after a Bloomberg report on Monday. Brett Redfearn, president of tokenization platform Securitize, expressed concern following the report, arguing that enabling third parties to tokenize stock “without an issuer at the table” could lead to fragmentation issues.  In a post to X on Thursday, Peirce said her expectation has always been that any exemption would be “limited in scope” by only permitting “digital representations of the same underlying equity security that an investor could purchase in the secondary market today.” Read more

SEC Commissioner Hester Peirce warned that layer-2 blockchains operating centralized matching engines may face exchange registration requirements while advocating for regulatory protection of truly decentralized protocols. During an interview on The Gwart Show, Peirce noted her vision for crypto regulation, drawing sharp distinctions between immutable code operating on decentralized networks and centralized entities using blockchain […] The post SEC’s Peirce warns L2 chains with centralized sequencers may face exchange registration appeared first on CryptoSlate.